The Cost Of Gross Profit Essays

1141 Words Nov 11th, 2015 null Page
Introduction The Company was designed in 1975 by Andrew Ritchie, he started designing a folding bike in his flat overlooking the Brompton Oratory in South Kensington, London. The first Brompton bikes are fairly crude but fold neatly and conveniently into a tiny package. It is a remarkable step forward in folding bike design on 1977.

Gross Profit Margin Gross profit margin is a profitability ratio that calculates the percentage of sales that exceed the cost of goods sold. The Gross profit margin shows how efficiently the business can produce and sell products or services. Gross profit margin calculated by subtracting cost of goods sold from total revenues and dividing the difference by total revenues:

The gross profit reflects the percentage gross profit generated through selling goods and services. In normal circumstances it is assumed that this ratio figure should be reasonably constant over time if the organization’s pricing policy and command over the market is both consistent and buoyant (Laughlin, R, 1988). For the company of Compton Bikes, the gross profit margin in 20X3 is 33.87%, and the gross profit margin in 20X4 is 36.96%. According to the data, it shows the gross profit margin increased from 20X3 to 20X4. It is a good signal for the Compton Bikes. A high gross profit margin shows the company is under a good financial health. Compare the gross profit between 20X3 and 20X4, the gross profit increased from 7,201 to 10,052 which means the Compton Bikes is under…

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